The earth owns the business!

The World’s First Bamboo Flying Disc – Becoming an E-CORP

I received an amazing message by email from a friend and fellow social entrepreneur. He has created the world’s first bamboo flying disc and would like to incorporate the E-CORP concept into his business model. How cool is that! We decided to move the conversation online, it is pasted below, so that you all could join in the discussion regarding how to implement these ideas. Russell is struggling a bit with the ownership concept and adds some great ideas regarding Open Source, Right Purpose and Inclusion. I will respond below in the comments and encourage each of you to do the same.

I’ve been working more on the Frisboo business plan. I have been trying to implement your e-Corp ideas. Most of it fits in just great. However, I am still struggling with the concept of the “Earth owning the business in trust”. I can’t work out what that means practically and thus have had to cut that concept out of my current revision.

I think there’s also two other principles that are worth adding: Open Source and Right Purpose. The first we’ve talked about– making the designs available via a wiki. The second is inspired from the Bhuddist concept of “Right Livelihood”. For instance, going from the principles you provided first, one could technically operate a bomb or gun making business under them. But I don’t think that’s quite right… so the added Principle is needed.

Second, I think “Zero to Landfill” could be articulated more positively by the term “Cradle to Cradle”.

Also, I think you could take out, or merge one of these two:

Transparency

Open Books

Especially if Open Source is another principle. They all kinda overlap. I am still struggling on what Open Books means exactly though. I will get back to you later on this as I think it through.

For the principles of minimum wage plus and defined maximum wage… I think this is important, but that’s it actually part of a larger principle for inclusion, equality and empowerment in the business. For example… I am haunted by a passage I read in a book about a lady who went out to research plastic production. She got to go to a Frisbee factory in China. She got to see these hundreds of people working monotonously making tens of thousands of Frisbees. At the end of her visit and reporting, the factory manager came up and asked her… “what do the people in your country do with these plastic things anyway?”.

So, here’s what I have come up with so far for Frisboo:

The Business

Frisboo .org is an E-corp enterprise. This means that the raison d’etre of the business is for the betterment of the Earth’s people, species and ecosystems. The Frisboo.org E-Corp will operate according to the following principals.:

Right-Purpose

The very product of the business is Good– it promotes the healthiness of people and planet. The Frisboo is for fun, collaborative play!

Open Source

Our work is available to the world, to be used by anyone and improved by anyone. Our Frisboo design will be made available for anyone anywhere to access and improve and add to using an online wiki.

100% Cradle to Cradle

Our product, processes and the running of our business produce no dead-end waste. Everything that would be traditionally considered “waste” is turned into an input for something else. Our chosen material is Bamboo which is means our product and manufacturing excess are all bio-degreadable. Our excess non-biological waste will be ecobricked by staff and employees.

It’s a big team: Minimum Wage Plus & Defined Maximum Wage

A wage bracket is established to maintain a defined ratio from the highest to the lowest paid person in the organization. Frisboo will have defined Minimum Wage Plus as 50% above the local minimum wage and the Defined Maximum wage is ten times the lowest wage. This keeps the wage gap relatively small and creates an incentive to raise the rate of the lowest paid person.

Transparency & Open Books

An E-CORP publicly publishes its financials. All or our books and working documents will be accessible online. Some will ask why aren’t we worried about our competition taking our ideas. We don’t view anyone as a competitor and welcome all who seek to lower the ecological and economic cost of mobility and transportation. We are committed to accelerating the transition to a clean economy.

See my reply in the comments below…

Be a part of the E-CORPS movement!

By adding your email here you will stay in the loop regarding this new way to organize business that protects the environment while promoting social and economic justice. Even if you do nothing else, adding your email here shows support for these ideas. That being said, we hope you do more!! Peace & Love

Wow! That is so cool that you are incorporating the E-CORP concept into your business model.

The concept of the “Earth owning the business in trust” is fundamental to an E-CORP. It is a commitment that the wealth generated by the business will in fact support and protect the Earth. I believe that removing the fiduciary responsibility to make money for shareholders and replacing it with a commitment to protecting the planet will result in fundamentally different choices and behaviors over time. That is a big part of what this “experiment” is about. The idea is to ensure that we are serving the Earth for the life of the enterprise. A trust could work. For Ewabi, the electric bamboo bike company in Bali that is the first to model these concepts, we are starting by creating a Yayasan (non-profit organization) which will oversee a PT Local (Indonesian corporation) whose bylaws irrevocably assign the wealth created by the corporation to the Yayasan. The bylaws will also commit the business to following the E-CORP principles. The Yayasan will be run by a Board of Trustees who will ensure that the E-CORP principles are upheld. Your business plan even without the “Earth owning the business in trust,” is still so amazing, however, it might confuse people as to what an E-CORP is if you were to call it one without incorporating some version of the Earth ownership principle.

It is a great idea to add Right Purpose to the list of principles that defines an E-CORP.

I also agree that Open Source and Open Books really fall under the single umbrella of Transparency. Open Books means that the company’s financials are made public. I realize that these ideas are really hard to commit to as they create a high level of exposure to the public and vulnerability. It is like having someone constantly looking over your shoulder which can be a bit annoying even if you are doing everything “right,” however you definitely will be more thoughtful about your actions and there is built in accountability. As with the ownership concept, I believe that transparency leads to a different set of choices and behaviors that will benefit society. Transparency can also be applied to things like communication (emails, minutes) as well as working documents. These are tough standards to live up to and I feel more than a little daunted by the whole endeavor, however, I also feel certain that the results will be transformational in a very positive way.

Regarding Zero to Landfill vs. Cradle to Cradle, I don’t find Zero to Landfill to be any less positive. I think it is very clear and actionable. I’d love to hear what others think. Both concepts address the same principle which is that there is no such thing as waste. Anything that is not used in the product or service that you are creating should be defined as the input for some other Right Purpose. This is the idea of the Circular Economy that is so beautifully articulated by the ELLEN MACARTHUR FOUNDATION

You are right that the Minimum Plus and Defined Maximum Wage are part of the larger principle of inclusion, equality and empowerment. I will fine tune the defining principles to incorporate these ideas.

In your finally paragraph you forgot to update “We don’t view anyone as a competitor and welcome all who seek to lower the ecological and economic cost of mobility and transportation” to serve your business case. You might consider replacing “mobility and transportation” with “fun.”

Your thoughtful feedback and input has significantly improved the E-CORP platform. Thank you Russell for this contribution and your commitment to run a business that protects the Earth and contributes to greater social and economic justice and equality around the world.

Her is a draft of how the E-CORP principles might be restated.

* The enterprise is owned in trust by the Earth (Green bonds are used for startup funds and working capital)
* Right purpose
* Inclusion, equality and empowerment (Profits are shared with employees up to 20%, Minimum Wage Plus, Defined Maximum Wage)
* Circular Economy Design (Net Positive Resource Use, Zero to Landfill, Cradle to Cradle)
* Transparency (Open Books, Open Source, Open Communication)

Love the Frisboo idea! But my comment is about the Earth ownership aspect. Ownership implies capital investment – and the Earth has done plenty of that – without expecting any return. But for an enterprise created by humans, we would need to raise capital from somewhere. A bank, whether in the form of a person or, well, a bank, can provide the capital and demand a fee (interest) for providing the capital. That’s normal for most businesses and is an expense. So is the money paid to the CEO for managing the enterprise. But the equity can remain with the Earth and the board of directors would be obligated to act on behalf of the shareholder (Earth) with decisions that are in line with the other Earth-preserving principles that Mark describes so well.

It could be a non-profit corporation that doesn’t rely on donations but rather something more sustainable: income from value-adding enterprise. Profits not shared with employees would be spent on growing the business, lending startup capital to other E-corps, or simply used to fund conservation or consciousness-raising campaigns.